Verified

Sri Lanka’s stocks rally as lending rates ease

Sri Lanka’s stock market surged this week, with the All-Share Price Index climbing 5.45 per cent to 21,239.65 points and the S&P SL20 rising 5.20 per cent to 6,045.38, the Central Bank’s latest weekly indicators show.

Borrowing costs eased as the Average Weighted Prime Lending Rate fell 22 basis points to 11.01 per cent. The overnight call money rate held steady at 9.04 per cent, while market liquidity stood at a surplus of Rs. 422.29 billion, up from Rs. 392.68 billion a week earlier.

Private sector credit expanded by Rs. 212.4 billion in September, a year-on-year rise of 23.6 per cent, while broad money grew 11.1 per cent. Net credit to the fell by Rs. 84.8 billion. On the external front, the rupee has depreciated 6.7 per cent against the US dollar this year. Gross official reserves were provisionally estimated at US$7,086 million at end-October, including proceeds from the People’s Bank of China swap arrangement. Workers’ remittances reached US$735.6 million in October, up from US$712.0 million a year earlier, while tourist arrivals totalled 168,625.

Global oil prices fell sharply, with Brent and WTI down US$18.03 and US$13.38 a barrel respectively, as talks between Iranian and Qatari officials raised hopes of easing Middle East tensions. Renewed attacks on oil tankers reversed part of the decline late in the week. In government securities, Treasury bill yields stayed broadly stable and the week’s bill auction was about 1.7 times oversubscribed. Foreign holdings of Treasury bills and bonds dropped roughly 3.2 per cent, while secondary market trading volumes rose about 14.1 percent